Global smartphone growth stalled in Q4, up just 1.2% for the full year: Gartner

Gartner’s smartphone marketshare data for the just gone holiday quarter highlights the challenge for device makers going into the world’s biggest mobile trade show which kicks off in Barcelona next week: The analyst’s data shows global smartphone sales stalled in Q4 2018, with growth of just 0.1 per cent over 2017’s holiday quarter, and 408.4 million units shipped.

tl;dr: high end handset buyers decided not to bother upgrading their shiny slabs of touch-sensitive glass.

Gartner says Apple recorded its worst quarterly decline (11.8 per cent) since Q1 2016, though the iPhone maker retained its second place position with 15.8 per cent marketshare behind market leader Samsung (17.3 per cent). Last month the company warned investors to expect reduced revenue for its fiscal Q1 — and went on to report iPhone sales down 15 per cent year over year.

The South Korean mobile maker also lost share year over year (declining around 5 per cent), with Gartner noting that high end devices such as the Galaxy S9, S9+ and Note9 struggled to drive growth, even as Chinese rivals ate into its mid-tier share.

Huawei was one of the Android rivals causing a headache for Samsung. It bucked the declining share trend of major vendors to close the gap on Apple from its third placed slot — selling more than 60 million smartphones in the holiday quarter and expanding its share from 10.8 per cent in Q4 2017 to 14.8 per cent.

Gartner has dubbed 2018 “the year of Huawei”, saying it achieved the top growth of the top five global smartphone vendors and grew throughout the year.

This growth was not just in Huawei “strongholds” of China and Europe but also in Asia/Pacific, Latin America and the Middle East, via continued investment in those regions, the analyst noted. While its expanded mid-tier Honor series helped the company exploit growth opportunities in the second half of the year “especially in emerging markets”.

By contrast Apple’s double-digit decline made it the worst performer of the holiday quarter among the top five global smartphone vendors, with Gartner saying iPhone demand weakened in most regions, except North America and mature Asia/Pacific.

It said iPhone sales declined most in Greater China, where it found Apple’s market share dropped to 8.8 percent in Q4 (down from 14.6 percent in the corresponding quarter of 2017). For 2018 as a whole iPhone sales were down 2.7 percent, to just over 209 million units, it added.

“Apple has to deal not only with buyers delaying upgrades as they wait for more innovative smartphones. It also continues to face compelling high-price and midprice smartphone alternatives from Chinese vendors. Both these challenges limit Apple’s unit sales growth prospects,” said Gartner’s Anshul Gupta, senior research director, in a statement.

“Demand for entry-level and midprice smartphones remained strong across markets, but demand for high-end smartphones continued to slow in the fourth quarter of 2018. Slowing incremental innovation at the high end, coupled with price increases, deterred replacement decisions for high-end smartphones,” he added.

Further down the smartphone leaderboard, Chinese OEM, Oppo, grew its global smartphone market share in Q4 to bump Chinese upstart, Xiaomi, and bag fourth place — taking 7.7 per cent vs Xiaomi’s 6.8 per cent for the holiday quarter.

The latter had a generally flat Q4, with just a slight decline in units shipped, according to Gartner’s data — underlining Xiaomi’s motivations for teasing a dual folding smartphone.

Because, well, with eye-catching innovation stalled among the usual suspects (who’re nontheless raising high end handset prices), there’s at least an opportunity for buccaneering underdogs to smash through, grab attention and poach bored consumers.

Or that’s the theory. Consumer interest in ‘foldables’ very much remains to be tested.

In 2018 as a whole, the analyst says global sales of smartphones to end users grew by 1.2 percent year over year, with 1.6 billion units shipped.

The worst declines of the year were in North America, mature Asia/Pacific and Greater China (6.8 percent, 3.4 percent and 3.0 percent, respectively), it added.

“In mature markets, demand for smartphones largely relies on the appeal of flagship smartphones from the top three brands — Samsung, Apple and Huawei — and two of them recorded declines in 2018,” noted Gupta.

Overall, smartphone market leader Samsung took 19.0 percent marketshare in 2018, down from 20.9 per cent in 2017; second placed Apple took 13.4 per cent (down from 14.0 per cent in 2017); third placed Huawei took 13.0 per cent (up from 9.8 per cent the year before); while Xiaomi, in fourth, took a 7.9 per cent share (up from 5.8 per cent); and Oppo came in fifth with 7.6 per cent (up from 7.3 per cent).

Xiaomi’s Mi 9 includes a triple lens rear camera and wireless charging

Mobile World Congress, the mobile industry’s annual shindig, is next week but Xiaomi can’t wait reveal its newest top-end phone. The Chinese company instead picked today to unveil the Mi 9.

Once again Xiaomi’s design ethic closely resembles Apple’s iPhone with a minimal bezel and notch-like front-facing camera but Xiaomi has gone hard on photography with a triple lens camera.

There are two models available with the regular Mi 9 priced from RMB 2999, or $445, and the Mi 9SE priced from RMB 1999, or $300. A premium model, the Transparent Edition, includes beefed-up specs for RMB 2299, $342.

The phone runs on Qualcomm’s Snapdragon 855 chipset and the headline feature, or at least the part that Xiaomi is shouting about most, is the triple lens camera array the back of the device. That trio combines a 48-megapixel main camera with a 16-megapixel ultra-wide-angle camera and a 12-megapixel telephoto camera, Xiaomi said. The benefits of that lineup is improved wide-angle shots, better quality close-up photography and performance in low-light conditions, according to the company.

The premium Mi 9 model, the Transparent Edition, sports 12GB of RAM and 256GB internal storage and features a transparent back cover

There’s also a ‘supermoon’ mode for taking shots of the moon and presumably other night sky images, while Xiaomi touts an improved night mode and, on the video side, 960fps capture and advanced motion tracking. We haven’t had the chance to test these out, which is worth noting at this point.

Xiaomi also talked up the battery features of the Mi 9, which ships with an impressive 3300mAh battery that features wireless charging support and Qi EPP certification meaning it will work with third-party charging mats. Xiaomi claims that the Mi 9 can charge to 70 percent in 30 minutes, and reach 100 percent in an hour using 27W wired charging.

Alongside the Mi 9, it unveiled its third three wireless charging products — a charging pad (RMB 99, $15), a car charger (RMB 169, $25) and a 10,000mAh wireless power bank (RMB 149, $22.)

Xiaomi, as ever, offers a range of different options for customers as follows:

  • Mi 9 with 6GB and 128GB for RMB 2999, $445
  • Mi 9 with 8GB and 128GB for RMB 3299, $490
  • Mi 9 with 12GB and 256GB for RMB 3999, $595
  • Mi 9SE with 6GB and 128GB for RMB 1999, $300
  • Mi 9SE with 6GB and 128GB for RMB 2299, $342 (Transparent Edition)

Notably, the Mi 9 goes on sale February 26 — pre-orders open this evening — with the SE version arriving on March 1. As expected, the launch market is China but you can imagine that India — where Xiaomi is among the top players — and other global launches will follow.

Xiaomi said it plans to announce more products on Sunday, the eve of Mobile World Congress. It recently teased a foldable phone so it’ll be interesting to see if it will follow suit and join Samsung, which had its first foldable phone outed by a leak.

 

Samsung is preparing to launch a sports smartwatch and AirPods-like earbuds

Samsung’s newest product launch happens next week, but already the Korean tech giant has revealed its entire upcoming range of wearable devices that will seemingly be unveiled alongside the Galaxy S10.

That’s because the company’s Galaxy Wearable’s app was uploaded today with support for a range of unreleased products which include wireless earbuds, a sports-focused smartwatch, and a new fitness band.

First reported by The Verge — and originally noticed by @SamCentralTech on Twitter — the new wearables include a Galaxy Sport smartwatch, fitness bands Galaxy Fit and Galaxy Fit e, Galaxy Buds, Samsung’s take on Apple’s AirPods. The devices have all been teased in various leaks in recent weeks but this confirmation from the Samsung app, deliberate or inadvertent, appears to all but confirm their impending arrival.

That said, we really can’t tell too much about the respective devices based on the app, which just shows basic renders of each device.

Still, that might just be enough of a tease to general a little more interest in what promises to be Samsung’s biggest consumer launch event of the year.

The Samsung unveiling comes days before Mobile World Congress, the mobile industry’s biggest event of the year, kicks off — so expect to see new product launches coming thick and fast over the coming weeks.

Sixteen percent of U.S. adults own a smartwatch

The latest figures out of NPD show a continued uptick in smartwatch sales, here in the States. The category has been a rare bright spot in an overall flagging wearable space, and the new numbers show gains pretty much across the board. In fact, the study puts smartwatch ownership at 16 percent among U.S. adults as of December — that figure is up from 12 percent a year prior.

Unsurprisingly, it’s a younger demo driving that growth — specifically 18-34-year-olds, where smartwatch ownership is around 23 percent. Of course, Apple and the like have been looking to increase purchases with the older crowd, courtesy of more serious health feature like last year’s addition of an ECG meter.

Apple, Samsung and Fitbit continue to dominate the market, making up 88 percent of the nearly $5 billion in sales tallied for the year ending in November. But companies like Fossil and Garmin made some marketshare gains. Google, naturally, will be looking to make a larger dent in the market, with its recent purchase of Fossil IP. Wear OS’s growth has been pretty flat, but that could change in 2019 with the rumored arrival of the Pixel Watch.

Sub-brands are the new weapon in China’s smartphone war

One of China’s top smartphone brands Vivo appears to have joined its fellows Oppo, Huawei and Xiaomi in setting up a new sub-brand as a softening market and heightened competition at home drive players to venture upon their original reach.

A new smartphone brand called iQoo made its debut on Weibo, China’s answer to Twitter, on Tuesday by greeting in English: “Hello, this is iQoo.” It also playfully encouraged people to guess how its name is pronounced, as the spelling doesn’t resonate with either Chinese or English speakers. Vivo immediately reposted iQoo’s message, calling iQoo a “new friend.”

Vivo has not further revealed its ties with iQoo, although the latter’s Weibo account is verified under Vivo’s corporate name. TechCrunch has contacted Vivo and will update the story when we have more information.

vivo iqoo

Screenshot of iQoo’s first Weibo post

Sub-brands have become a popular tactic for Chinese smartphone makers to lure new demographics without undermining and muddling their existing brand reputation. As the third-ranked player by shipments in 2018 according to research firm Counterpoint, Vivo is the only one in China’s top five smartphone companies without a subsidiary brand.

“Sub-brands can help fill the gap in parent companies,” Counterpoint’s research director James Yan told TechCrunch. “I think iQoo is a brand born for the gaming market, the online sales channel, or young consumers, similar to what Honor did to Huawei.”

Huawei cemented its top spot with solid growth in shipments last year by playing a two-pronged strategy. Its sub-brand Honor has its eyes on the mid-range and Huawei stays at the top end. Vivo’s sibling Oppo, which falls under the same electronics manufacturing outfit BBK, came up with an exclusively online brand Realme in 2018 to go after Xiaomi’s Redmi in India’s burgeoning smartphone market. Xiaomi pressed on by launching Poco for India’s high-tier market. To further solidify its multi-faceted approach, Redmi shed the Xiaomi branding in January to start operating as an independent brand focusing on cost efficiency.

These moves arrived as years of breakneck growth in China’s smartphone space comes to an end. Overall smartphone sales contracted 11 percent in 2018 according to Counterpoint, as users become more pragmatic and less likely to upgrade their handsets. Local players reacted swiftly by going global and introducing headline-grabbing features like Xiaomi’s folding screen and Honor’s pole-punch display, putting a squeeze on global players Apple and Samsung. In 2018, Huawei shored up a 25 percent market share to take the crown. Trailing behind was Oppo, Vivo, Xiaomi and Apple . Samsung plunged 67 percnet to take seventh place.

Samsung promises a better look at its folding phone next week

Samsung’s not telling us anything we don’t already know with its latest teaser. But before I hop on yet another flight to San Francisco, it’s good to know I’m getting a little more bang for my (well, Verizon’s) buck.

In addition to the Galaxy S10, Samsung will also be offering a much better glimpse of its long-promised foldable phone at its SF event on February 20. A new animated teaser promises that “The Future Unfolds” at the event that’s currently a little over a week away.

If you’ll recall, the company offered a very fleeting glimpse of the product at its developers conference, but the product was shrouded in mystery — not to mention pretty unwieldy prototype hardware.

The most likely scenario for next week’s event is a more detailed glimpse at the future product, including a name— and perhaps even something approaching a release date. Most likely, however, the company and event will be largely focused on the details around its next flagship.

What to expect from Mobile World Congress 2019

I’ve said it before, and I’ll say it again: 2019 just might be the year that smartphones get fun again. After years of similar form factors and slight upgrades, the mobile industry’s back is against the wall.

For the first time ever, sales are down, owning to economic factors and slower upgrade cycles. Most people who want good phones have had access to them for a while, and smartphone makers are providing fewer compelling reasons to buy new ones.

With their backs against the wall, handset makers are getting creative. We’ve already seen some early fruits from companies late last year and last month at CES. But MWC is really going to be their time to shine. It’s a much larger mobile show, and all parties know that everyone’s bringing the big guns.

Here’s what we expect to see in Barcelona February 24-28.

Huawei: The company looks to have a lot on tap for the event — in part because the North America-based CES is kind of a non-starter. CEO Richard Yu has hinted at a foldable and a 5G handset — which could well be the same phone. More mainstream are the P30 and P30 Pro. The company’s done a good job keeping it under wraps, but rumors about three or four rear-lenses have made the rounds.

LG: As is its move, LG has already announced the G8 ThinQ. We know that the new flagship will feature a front-facing camera with Time of Flight sensor that brings potential tricks like face unlock, along with AR applications. The V50 is also reportedly on tap, potentially bringing 5G along for the ride.

Microsoft: A surprise addition to this year’s show, Microsoft’s already announced an event for February 24, where we expect the company will show off the HoloLens 2. The next-gen version of the headset will arrive as the rest of the hardware and software world is finally ready to embrace augmented reality in earnest.

Motorola: The recent launch of the G7 may have taken the wind out of MWC’s sails, but rumors of a foldable Razr reboot are making the rounds.

OnePlus: We know that a 5G handset and the OnePlus 7 are both in the pipeline — and, perhaps, one and the same? There’s also tell of a closed-door event at the show, but most aren’t expecting any big unveils from the company.

Samsung: Don’t expect a ton out of Samsung this year. The company (inconveniently) is holding its big event a mere days before. Expect the S10 and all its iterations to get a big unveil that week in San Francisco, along with a preview of the company’s upcoming foldable. That doesn’t leave a heck of a lot for MWC, but perhaps we’ll get a peek into the world of wearables or PCs.

Sony: While Xperia phones have long felt like a bit of a loss leader, the electronics giant has always made a big show of launching flagship devices. Those, in turn, have long been a launchpad for some exciting camera tricks. This year, the Xperia XZ4 appears to be on tap for the event. The handset looks to be an interesting one, with a reported 21:9 aspect ratio display and a beefy 4,400 mAh battery.

As threats proliferate, so do new tools for protecting medical devices and hospitals

Six months after an episode of “Homeland” showed hackers exploiting security vulnerabilities in the (fictional) Vice President’s pacemaker, Mike Kijewski, the founder of a new startup security company called Medcrypt, was approached by his (then) employers at Varian Medical Systems with a unique problem. 

“A hospital came to the company and said we are treating a patient and a nation-state may attempt to assassinate the patient that we’re treating by using a cybersecurity vulnerability in a medical device to do it,” Kijewski recalled.

At the time, there were no universal solutions to those types of security threats — so companies were left to cobble together one-off solutions for their devices, which is what Kijewski’s former employer likely attempted to do.

Ever since, Kijewski became obsessed with the security holes that exist in the foundation of the healthcare industry’s practice — the devices used to diagnose and treat patients.

“My partner Eric Pancoast and I looked into the problem of medical device cybersecurity and we found two things,” says Kijewski. “Number one there were no regulations forcing medical device companies to use cybersecurity protections at all. Number two, any given company has only one core competency — maybe two. And are medical device vendors going to have cryptography and cybersecurity competencies?”

Medcrypt was launched in 2016 to ensure that medical device manufacturers wouldn’t need to be cryptographic experts. The company is graduating from the latest batch of Y Combinator (after raising a $3 million seed round from Eniac Ventures and other investors) with a pitch to secure medical devices using just a single line of code.

It’s a technological necessity thanks to new guidelines from the Food and Drug Administration requiring medical devices to include security features like encryption, signature verification, and intrusion detection.

By inserting a single line of code into the software of a device, Medcrypt can provide the security manufacturers need at the device level, according to Kijewski.

The company not only encrypts the data on the device, but it also provide intrusion detection services by analyzing medical device metadata to identify standard device behaviors and deviations from that behavior, Kijewski said.

Medcrypt is one of a growing number of startups that are securing medical devices and hospital networks as the threats to the healthcare system proliferate.

Other startups are working on protecting hospital networks. Companies like Medigate, founded by ex-Israeli officers from the Israeli Defense Forces, which just raised $15 million from investors including YL Ventures and US Venture Partners; and Cylera, which is backed by Samsung Next and launched from the DreamIT healthcare accelerator are two such companies.

By 2017, Beckers Health IT and CIO Report counted over 107 technology companies pitching cybersecurity solutions to healthcare practitioners and medical device manufacturers.

It’s little wonder so many companies are pouring in to close the (data) breach in healthcare, given the scope of the problem.

A 2018 report from Experian cited by U.S. News indicated that 233 breaches were reported to the Department of Health and Human Services, media, or state attorneys general in the period from January to June 2017. And for the 193 attacks where the scope of the breach was calculated, roughly 3.2 million patient records were affected.

Experian predicts healthcare cybersecurity spending will be a $65 billion industry by 2021.

Still, some of the security problems that hospitals face can be solved with some fairly basic updates. Indeed, perhaps the most critical — and the one that left hospitals most exposed — is just ensuring that their technology can accept patches and security upgrades. Many of the attacks that crippled health networks came down to an inability to upgrade their Windows operating systems.

Sometimes, all it takes is tightening the screws to make sure the machines don’t fall apart.

“Connected medical devices — from patient monitors, MRIs and CAT scanners to infusion pumps and yet-to-be invented devices — are critical to the delivery of healthcare today and are revolutionizing the care of tomorrow,” said YL Ventures founder Yoav Leitersdorf in a statement announcing Medigate’s 2017 financing. “These devices are inherently different from traditional IT endpoints and can’t be protected by currently available products and practices. With the pandemic of cyberattacks targeting healthcare providers, far too many connected devices are left vulnerable and exposed, putting patient health and privacy at risk.”

 

Digital influencers and the dollars that follow them

Animated characters are as old as human storytelling itself, dating back thousands of years to cave drawings that depict animals in motion. It was really in the last century, however—a period bookended by the first animated short film in 1908 and Pixar’s success with computer animation with Toy Story from 1995 onwards—that animation leapt forward. Fundamentally, this period of great innovation sought to make it easier to create an animated story for an audience to passively consume in a curated medium, such as a feature-length film.

Our current century could be set for even greater advances in the art and science of bringing characters to life. Digital influencers—virtual or animated humans that live natively on social media—will be central to that undertaking. Digital influencers don’t merely represent the penetration of cartoon characters into yet another medium, much as they sprang from newspaper strips to TV and the multiplex. Rather, digital humans on social media represent the first instance in which fictional entities act in the same plane of communication as you and I—regular people—do. Imagine if stories about Mickey Mouse were told over a telephone or in personalized letters to fans. That’s the kind of jump we’re talking about.

Social media is a new storytelling medium, much as film was a century ago. As with film then, we have yet to transmit virtual characters to this new medium in a sticky way.

Which isn’t to say that there aren’t digital characters living their lives on social channels right now. The pioneers have arrived: Lil’ Miquela, Astro, Bermuda, and Shudu are prominent examples. But they have are still only notable for their novelty, not yet their ubiquity. They represent the output of old animation techniques applied to a new medium. This Techcrunch article did a great job describing the current digital influencer landscape.

So why haven’t animated characters taken off on social media platforms?  It’s largely an issue of scale—it’s expensive and time-consuming to create animated characters and to depict their adventures.  One 2017 estimate stated that a 60-90 second animation took about 6 weeks.  An episode of animated TV takes between 13 months to produce, typically with large teams in South Korea doing much of the animation legwork. That pace simply doesn’t work in a medium that calls for new original content multiple times a day.

Yet the technical piece of the puzzle is falling into place, which is primarily what I want to talk about today. Traditionally, virtual characters were created by a team of experts—not scalable—in the following way:

  • Create a 3D model
  • Texture the model and add additional materials
  • Rig the 3D model skeleton
  • Animate the 3D model
  • Introduce character into desired scene

 

Today, there are generally three different types of virtual avatar:  realistic high-resolution CGI avatars, stylized CGI avatars, and manipulated video avatars. Each has its strengths and pitfalls, and the fast-approaching world of scaled digital influencers will likely incorporate aspects of all three.

The digital influencers mentioned above are all high-resolution CGI avatars. It’s unsurprising that this tech has breathed life into the most prominent digital influencers so far—this type of avatar offers the most creative latitude and photorealism. You can create an original character and have her carry out varied activities.

The process for their creation borrows most from the old-school CGI pipeline described above, though accelerated through the use of tools like Daz3D for animation, Moka Studio for rigging, and Rokoko for motion capture. It’s old wine in new bottles. Naturally, it shares the same bottlenecks as the old-school CGI pipeline: creating characters in this way consumes a lot of time and expertise.

Though researchers like Ari Shapiro at the University of Southern California Institute for Creative Technologies are currently working on ways to automate the creation of high-resolution CGI avatars, that bottleneck remains for obstacle for digital influencers entering the mainstream.

Stylized CGI avatars, on the other hand, have entered the mainstream. If you have an iPhone or use Snapchat, chances are you have one. Apple, Samsung, Pinscreen, Loom.ai, Embody Digital, Genies, and Expressive.ai are just some of the companies playing in this space. These avatars, while likely to spread ubiquitously a la Bitmoji before them, are limited in scope.

While they extend the ability to create an animated character to anyone who uses an associated app, that creation and personalization is circumscribed: the avatar’s range is limited for the purposes of what we’re discussing in this article. It’s not so much a technology for creating new digital humans as it is a tool for injecting a visual shorthand for someone into the digital world. You’ll use it to embellish your Snapchat game, but storytellers will be unlikely to use these avatars to create a spiritual successor to Mickey Mouse and Buzz Lightyear (though they will be a big advertising / brand partnership opportunity nonetheless).

Video manipulation—you probably know it as deepfakes—is another piece of tech that is speeding virtual or fictional characters into the mainstream. As the name implies, however, it’s more about warping reality to create something new. Anyone who has seen Nicolas Cage’s striking features dropped onto Amy Adams’ body in a Superman film will understand what I’m talking about.

Open source packages like this one allow almost anyone to create a deepfake (with some technical knowhow—your grandma probably hasn’t replaced her time-honored Bingo sessions with some casual deepfaking). It’s principally used by hobbyists, though recently we’ve seen startups like Synthesia crop up with business use cases. You can use deepfake tech for mimicry, but we haven’t yet seen it used for creating original characters. It shares some of the democratizing aspects of stylized CGI avatars, and there are likely many creative applications for the tech that simply haven’t been realized yet.

While none of these technology stacks on their own currently enable digital humans at scale, when combined they may make up the wardrobe that takes us into Narnia. Video manipulation, for example, could be used to scale realistic high-res characters like Lil’ Miquela through accelerating the creation of new stories and tableaux for her to inhabit. Nearly all of the most famous animated characters have been stylized, and I wouldn’t bet against social media’s Snow White being stylized too. What is clear is that the technology to create digital influencers at scale is nearing a tipping point. When we hit that tipping point, these creations will transform entertainment and storytelling.

Samsung posts fourth-quarter profit drop, warns of weak demand until the second half of 2019

Samsung Electronics reported its largest quarterly profit decline in two years during its earnings report today. As the Galaxy maker warned in its earnings guidance earlier this month, its results were hurt by slower-than-expected demand for semiconductors, which had bolstered its earnings in previous quarters even when smartphone sales were slow.

Samsung’s forecast was also dour, at least for the first half of the year. It said annual earnings will decline thanks to continuing weak demand for chips, but expects demand for memory products and OLED panels to improve during the second half.

The company’s fourth-quarter operating profit was 10.8 trillion won (about $9.7 billion), a 28.7 percent decrease from the 15.15 trillion won it recorded in the same period one year ago. Revenue was 59.27 trillion won, a 10.2 percent drop year over year.

Broken out by business, Samsung’s semiconductor unit recorded quarterly operating profit of 7.8 trillion won, down from 10.8 trillion won a year ago. Its mobile unit’s operating profit was 1.5 trillion won, compared to 2.4 trillion won a year ago.

Smartphone makers, including Samsung rival Apple, have been hit hard by slowing smartphone sales around the world, especially in China. Upgrade cycles are also becoming longer as customers wait to buy newer models.

This hurt both Samsung’s smartphone and chip sales, as “overall market demand for NAND and DRAM drop[ped] due to macroeconomic uncertainties and adjustments in inventory levels by customers including datacenter companies and smartphone makers,” said the company’s earnings report.

Samsung expects chip sales to be sluggish during the first quarter because of weak seasonality and inventory adjustments by its biggest customers. The company was optimistic about the last two quarters of 2019, when it expects demand for chips and OLED panels to pick up thanks seasonal demand and customers finishing their inventory adjustments.